JP Morgan Raises Treasury Rate Forecasts

By Michael Aneiro

More analysts are playing forecast catch-up with the recent reality of sharply rising rates. In response to Friday’s better-than-expected payroll data and the resulting surge in Treasury yields, JP Morgan on Monday said it’s revising its Treasury rate forecasts higher. “We now expect 10Y Treasury yields to head towards 3.25% by mid-2014, up from our previous forecast of 3%,” JPM writes. JPM sees rates falling in the short-term, with an expected 10-year note yield of 2.55% a month from now, before rising 2.85% at year-end and 3.0% at the end of March 2014. JPM sees the 30-year yield at 3.8% at year-end and 4.1% a year from now.

Treasury yields fell Monday, rebounding from their Friday surge, with the ten-year note gaining 20/32 in price to yield 2.638% at day-end, per Tradeweb data, while the 30-year bond gained 22/32 to lower its yield to 3.636%.